September

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Accounting Roundup – August 2010

03 Sep 2010

We have posted the August 2010 Edition of Accounting Roundup published by Deloitte & Touche LLP (United States). The newsletter covers United States and international accounting and auditing matters, including IASB-FASB convergence.

Topics covered in this issue include:

Compensation – Stock Compensation

  • Accounting Considerations Related to the New Policies Proposed by the Special Master for TARP Executive Compensation
Contingencies
  • Comment Period Extended for Proposed ASU on Disclosure of Certain Loss Contingencies
Fair Value Measurements and Disclosures
  • IASB Issues Staff Draft on Fair Value Measurements
Insurance Contracts
  • IASB Issues Exposure Draft on Insurance Contracts
Leases
  • FASB and IASB Issue Proposed Guidance on Lease Accounting
Presentation of Financial Statements
  • IASB Issues Proposed Amendments to IFRS 1
Industry Accounting
  • IFRS Interpretations Committee Issues Proposed Guidance on Surface Mining
Other Accounting
  • FASB Chairman Herz to Retire; FAF to Increase Size of FASB
  • FASB Issues ASU on Accounting for Technical Amendments to Various SEC Rules and Schedules
  • FASB Issues ASU on Accounting for Technical Corrections to SEC Paragraphs
  • FASB Issues Various ASUs and Proposed ASUs Related to Issues Discussed at July EITF Meeting
  • FAF Issues U.S. GAAP Financial Reporting Taxonomy for Review and Comment
  • IFRS Foundation Appoints Members of the SME Implementation Group
  • IFRS Taxonomy Updated for Improvements to IFRSs
  • 2010 OMB Circular A-133 Compliance Supplement Is Issued
Other SEC Matters
  • SEC Requests Comments on Incorporating IFRSs Into the Financial Reporting System for U.S. Issuers
  • SEC Issues C&DI Updates
  • SEC Issues Shareholder Access Rule
Other Auditing
  • PCAOB Issues Release on the Responsibilities of Registered Public Accounting Firms and Supervisory Personnel
  • PCAOB Adopts Auditing Standards Related to the Auditor's Assessment of and Response to Risk
  • PCAOB Staff to Develop Proposal to Make Disciplinary Hearings and Related Proceedings Public
  • A Summary of the July 15 Meeting of the PCAOB's Standing Advisory Group
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Notes from the September 2010 Interpretations Committee meeting and podcast

03 Sep 2010

The IFRS Interpretations Committee (IFRIC) met at the IASB's offices in London on Thursday and Friday, 2-3 September 2010. The topics discussed were as follows (click through to detailed Deloitte observer notes for that topic):

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Deloitte comment letter on the FASB's proposed accounting for financial instruments

03 Sep 2010

Deloitte's IFRS Global Office has forwarded to the IASB a letter of comment sent to the FASB on the proposed Accounting Standards Update (ASU) Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities, which was published in May 2010.

Considering the objective of both Boards for a single converged standard the letter was forwarded to the IASB for information and consideration. Below is an excerpt from the letter:

We welcome the Board’s effort to improve accounting for financial instruments. We support the Board’s objective of providing financial statement users with more timely and representative information about an entity’s involvement with financial instruments, and we share the Board’s desire to reduce excessive complexity in the accounting for financial instruments. In addition, we support the Board’s steps toward achieving the goal of a single set of high-quality global accounting standards in this important area. In our view, however, the proposed ASU falls short of accomplishing these objectives, and accordingly we do not support the issuance of the proposed ASU as a final standard.

To support well-functioning global capital markets, a single converged financial reporting model for financial instruments for the benefit of financial statements users should be a top priority. We are concerned, therefore, that the FASB and IASB are developing divergent models for how to account for financial instruments. The model in the proposed ASU is significantly different from the classification and measurement model for financial assets in IFRS 9 and from the proposed model for financial liabilities in the IASB’s exposure draft ED/2010/4. In addition, the credit impairment models being proposed by the two boards differ in important respects. Further, the IASB is currently deliberating an approach to hedge accounting that is different from that in the proposed ASU. If the development of a common set of high-quality global accounting standards is to be achieved, the accounting for financial instruments must be a key area of focus. Accordingly, we strongly encourage the two boards to work collaboratively with a common goal of achieving convergence in this important area by agreeing to a single converged high-quality accounting standard for financial instruments.

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Understanding the role of professional accountants in business

03 Sep 2010

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released for comment a Consultation Paper that highlights how employer expectations of professional accountants in business are expected to change in light of global trends and evolving organisational needs.

The paper analyses these expectations in relation to eight drivers of sustainable organisational success, providing the framework for key activities that professional accountants will be expected to perform. The drivers were defined based on an analysis of three long-term trends influencing organisations: globalisation, complexity, and technology.

The Consultation Paper asks whether IFAC member bodies and associates would find it useful for an international competency framework to be developed, covering the roles and domain of professional accountants in business.

Extracts from the paper:

Globalization

Two significant global issues will impact organizations and markets and hence the role of professional accountants in business. The first is the diffusion of economic power in the global economy across a wider range of regions and countries, underpinned by the deployment of information technology, greater economic openness, and the growing size and reach of multinational companies. The second issue is sustainable development, and in particular climate change, which has now become a defining issue of our era. With this increased attention has come an increased demand for reliable decision-making information.

Complexity

... Regulators and standard setters will also have to accept their responsibility for tackling complexity. Shifting from more to better and evidence-based regulation and oversight would enable organizations to more effectively and efficiently create stakeholder value and to properly account for how they are doing so. In addition, global convergence of standards and regulation, as well as global coordination of oversight could also help reduce complexity and the cost of business.

Comments on the Consultation Paper are requested by 30 November 2010. Click for IFAC press release (link to IFAC website).

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Newsletter on removal of fixed dates for first-time adopters

03 Sep 2010

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB issues Exposure Draft on Removal of Fixed Dates for First-time Adopters.

This newsletter describes the recent IASB proposal to amend IFRS 1 First-time Adoption of International Financial Reporting Standards. The ED proposes to provide relief to first-time adopters of IFRSs by amending IFRS 1 as follows:
  • it amends the date of prospective application of the derecognition of financial assets and liabilities from '1 January 2004' to 'the date of transition to IFRSs' so that first-time adopters of IFRSs do not have to apply the derecognition requirements in IAS 39 retrospectively; and
  • it amends the date of prospective application of the requirement to fair value financial assets and liabilities to transactions entered into 'on or after the date of transition to IFRSs', which would relieve first-time adopters from recalculating 'day 1' differences on initial recognition for those transactions occurring before the date of transition to IFRSs.
The ED comment period ends on 27 October 2010.

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IASB and FASB publish questionnaire for lessees and lessors

02 Sep 2010

The IASB and the US FASB published a questionnaire for lessees and lessors as part of their outreach on the Leases project.

In the questionnaire, the boards are surveying organisations on their use of, and accounting for, leases. Completing the questionnaire does not require knowledge of the boards' proposals. Further details are available on the IASB's website. The deadline to complete the questionnaire(s) is 30 September 2010.

 

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Heads Up on FASB Exposure Draft on multiemployer plans

02 Sep 2010

Further to our story of 1 September, Deloitte (United States) has published a new Heads Up Newsletter discussing certain aspects of the FASB exposure draft (ED), Disclosure About an Employer's Participation in a Multiemployer Plan.

The disclosures proposed by the FASB are similar to those proposed by the IASB in its exposure draft ED/2010/3 Defined Benefit Plans – Amendments to IAS 19 issued in April 2010.

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New IFRS publication from Deloitte India

02 Sep 2010

Deloitte (India) has published Tracking IFRS. This publication provides a summary of the IASB exposure draft ED/2010/6 Revenue from Contracts with Customers and includes preliminary observations with respect to the possible impacts of the exposure draft on current practice in India. Companies in India will transition to Indian accounting standards converged with IFRSs from 2012 onwards.

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Singapore Exchange encourages sustainability reporting

02 Sep 2010

Singapore Exchange ("SGX") has issued a proposed "Policy Statement on Sustainability Reporting" and accompanying Guide for SGX listed companies to use in formulating their sustainability reporting.

The proposed sustainability reporting is voluntary. SGX is of the view that as more companies become inspired to adopt sustainability reporting, it will be natural to take the next step on guidelines and standards leading to rules.

Following is an extract from the proposed guidelines:

The Exchange encourages the adoption of internationally accepted reporting frameworks, such as the Global Reporting Initiative (GRI) Reporting Framework, in disclosing the issuer's sustainability performance. The GRI Reporting Framework is universally applicable to all organisations and sets out general principles and indicators that issuers can use to measure and report their economic, environment and social performance.

The proposals are open for comment until 29 October 2010. Click for:

IASB (International Accounting Standards Board) (blue) Image

New editorial corrections to IFRSs

01 Sep 2010

The IASB has posted to its website a new batch of Editorial Corrections to IFRSs.

This batch includes editorial corrections and changes to IFRS for SMEs (issued July 2009), IFRS 9 Financial Instruments (issued November 2009), Improvements to IFRSs (issued May 2010), Bound Volume (Red Book) 2010 and Bound Volume (Blue Book) 2010.
Click for Editorial Corrections to IFRSs (link to IASB website).

 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.